Biz2Credit Identifies 2014's Best Small Business Cities for Minority Entrepreneurs in America

Analysis Examined Markets with the Highest Annual Revenue, Credit Scores and Other Factors

Biz2Credit has identified San Jose as the Best Small Business City for minority entrepreneurs in America, based on a weighted average that includes annual revenue, credit score, age of business (in months), cash flow, debt-to-income ratio, incorporation (C-Corp or LLC vs. sole proprietorship), and business owners' personal credit scores. The study defined minorities as Asian, African American and Hispanic Americans.

"San Jose is a hub for small business, but people might not immediately expect it to be a booming place for minority-owned companies," said Biz2Credit CEO Rohit Arora, one of the nation's leading experts in small business finance, who oversaw the research. According to U.S. Census Bureau statistics, Hispanics represent nearly a third of the population in San Jose, while Asians (non-Hispanic) represent just over 30 percent of the population. "Surprisingly, Denver scored very well in the study, largely because of the booming fresh produce and organic food industry, which is popular amongst minorities."

Meanwhile, despite being a popular destination for immigrants and minorities city in a thriving economy, the New York City metro area ranked only eighth in the Biz2Credit's Best Small Business Cities for minority entrepreneurs largely because of the high fixed costs of conducting business.

"While New York City is an appealing location for entrepreneurs to start a business, the reality is that high fixed and marginal costs negatively impact the bottom line of small business owners," Arora explained. According to statistics from the U.S. Census Bureau, African Americans (just over 25%) Hispanics (28.6%) and Asians (12.7%) combine to comprise the majority of New York City's population.

For this analysis, Biz2Credit defined "small businesses" as companies having fewer than 250 employees and/or less than $10 million in annual revenues. The Top 25 Cities for Small Business for minority entrepreneurs in 2014 are:

San Jose -Santa Clara, CA

Denver, CO

San Diego, CA

Riverside-San Bernardino, CA

San Francisco-Oakland, CA

Indianapolis, IN

Los Angeles, CA

New York metro area

Atlanta, GA

Miami-Fort Lauderdale-West Palm Beach, FL

Las Vegas, NV

Washington DC metro area

Portland, OR

Charlotte, NC

Houston, TX

Phoenix-Scottsdale, AZ

Detroit, MI

Sacramento, CA

Chicago, IL

Dallas-Ft. Worth, TX

Seattle, WA

Tampa-St. Petersburg, FL

Philadelphia, PA

Orlando, FL

Jacksonville, FL

When sorted by Annual Revenue, Riverside-San Bernardino, CA was the leader. The New York metro area rounded out the bottom of the list in the top 25.

Top 25 Metro areas with the highest applications in 2013

Average Annual Revenue

Average Credit Score

Average of Age in Months

Average BizAnalyzer Score

Riverside-San Bernardino-Ontario, CA

$1,380,613

608

41.8

53.8

San Diego-Carlsbad, CA

$971,025

647

62.3

53.9

Jacksonville, FL

$929,868

596

29.7

46.2

Portland-Vancouver-Hillsboro, OR-WA

$840,692

642

40.2

51.0

Los Angeles-Long Beach-Anaheim, CA

$827,148

638

47.1

52.4

Denver-Aurora-Lakewood, CO

$734,761

640

56.8

54.3

Charlotte-Concord-Gastonia, NC-SC

$705,956

590

51.9

50.4

Indianapolis-Carmel-Anderson, IN

$610,646

620

50.7

52.6

Chicago-Naperville-Elgin, IL-IN-WI

$596,565

625

37.4

49.1

New York-Newark-Jersey City, NY-NJ-PA

$486,141

635

44.7

51.9

San Jose-Sunnyvale-Santa Clara, CA

$446,395

665

69.6

56.8

Atlanta-Sandy Springs-Roswell, GA

$427,100

614

46.0

51.8

Miami-Fort Lauderdale-West Palm Beach, FL

$417,819

620

43.7

51.6

San Francisco-Oakland-Hayward, CA

$390,510

627

68.1

52.7

Seattle-Tacoma-Bellevue, WA

$388,276

607

27.5

48.6

Houston-The Woodlands-Sugar Land, TX

$348,329

621

32.7

50.3

Las Vegas-Henderson-Paradise, NV

$332,184

632

36.2

51.4

Dallas-Fort Worth-Arlington, TX

$321,465

616

30.7

48.8

Washington-Arlington-Alexandria, DC-VA-MD-WV

$280,746

614

52.8

51.2

Phoenix-Mesa-Scottsdale, AZ

$274,277

626

46.5

50.1

Orlando-Kissimmee-Sanford, FL

$189,049

609

26.1

46.8

Tampa-St. Petersburg-Clearwater, FL

$168,779

621

39.4

48.6

Sacramento--Roseville--Arden-Arcade, CA

$146,252

627

33.1

49.9

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

$74,143

619

31.3

47.1

Detroit-Warren-Dearborn, MI

$56,249

605

30.8

50.0

National Average

$383,667

620

40.5

50.0

"Centers of technological innovation are booming. Cities like Portland and Jacksonville are taking advantage of their slower pace, lower costs and good standard of living offered to residents," Arora says.

When sorted by Age of Business (in months), Orlando was the leader.

Top 25 Metro areas with the highest applications in 2013

Average Annual Revenue

Average Credit Score

Average of Age in Months

Average BizAnalyzer Score

Orlando-Kissimmee-Sanford, FL

$189,049

609

26.1

46.8

Seattle-Tacoma-Bellevue, WA

$388,276

607

27.5

48.6

Jacksonville, FL

$929,868

596

29.7

46.2

Dallas-Fort Worth-Arlington, TX

$321,465

616

30.7

48.8

Detroit-Warren-Dearborn, MI

$56,249

605

30.8

50.0

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

$74,143

619

31.3

47.1

Houston-The Woodlands-Sugar Land, TX

$348,329

621

32.7

50.3

Sacramento--Roseville--Arden-Arcade, CA

$146,252

627

33.1

49.9

Las Vegas-Henderson-Paradise, NV

$332,184

632

36.2

51.4

Chicago-Naperville-Elgin, IL-IN-WI

$596,565

625

37.4

49.1

Tampa-St. Petersburg-Clearwater, FL

$168,779

621

39.4

48.6

Portland-Vancouver-Hillsboro, OR-WA

$840,692

642

40.2

51.0

Riverside-San Bernardino-Ontario, CA

$1,380,613

608

41.8

53.8

Miami-Fort Lauderdale-West Palm Beach, FL

$417,819

620

43.7

51.6

New York-Newark-Jersey City, NY-NJ-PA

$486,141

635

44.7

51.9

Atlanta-Sandy Springs-Roswell, GA

$427,100

614

46.0

51.8

Phoenix-Mesa-Scottsdale, AZ

$274,277

626

46.5

50.1

Los Angeles-Long Beach-Anaheim, CA

$827,148

638

47.1

52.4

Indianapolis-Carmel-Anderson, IN

$610,646

620

50.7

52.6

Charlotte-Concord-Gastonia, NC-SC

$705,956

590

51.9

50.4

Washington-Arlington-Alexandria, DC-VA-MD-WV

$280,746

614

52.8

51.2

Denver-Aurora-Lakewood, CO

$734,761

640

56.8

54.3

San Diego-Carlsbad, CA

$971,025

647

62.3

53.9

San Francisco-Oakland-Hayward, CA

$390,510

627

68.1

52.7

San Jose-Sunnyvale-Santa Clara, CA

$446,395

665

69.6

56.8

National Average

$383,667

620

40.5

50.0

In this section of the study, newer businesses (in average age) were represented at the top of the list, which indicates a higher startup rate for small businesses. "Orlando's economy generates a large percentage of business from the tourism industry, which minority entrepreneurs are becoming increasingly involved in," said Arora.

When sorted by Credit Score, San Jose was the leader. Rounding out the Top 25 was: San Diego, Portland, Denver, Los Angeles, New York metro, Las Vegas, Sacramento, San Francisco-Oakland, and Phoenix-Scottsdale.

Top 25 Metro areas with the highest applications in 2013

Average Annual Revenue

Average Credit Score

Average of Age in Months

Average BizAnalyzer Score

San Jose-Sunnyvale-Santa Clara, CA

$446,395

665

69.6

56.8

San Diego-Carlsbad, CA

$971,025

647

62.3

53.9

Portland-Vancouver-Hillsboro, OR-WA

$840,692

642

40.2

51.0

Denver-Aurora-Lakewood, CO

$734,761

640

56.8

54.3

Los Angeles-Long Beach-Anaheim, CA

$827,148

638

47.1

52.4

New York-Newark-Jersey City, NY-NJ-PA

$486,141

635

44.7

51.9

Las Vegas-Henderson-Paradise, NV

$332,184

632

36.2

51.4

Sacramento--Roseville--Arden-Arcade, CA

$146,252

627

33.1

49.9

San Francisco-Oakland-Hayward, CA

$390,510

627

68.1

52.7

Phoenix-Mesa-Scottsdale, AZ

$274,277

626

46.5

50.1

Chicago-Naperville-Elgin, IL-IN-WI

$596,565

625

37.4

49.1

Houston-The Woodlands-Sugar Land, TX

$348,329

621

32.7

50.3

Tampa-St. Petersburg-Clearwater, FL

$168,779

621

39.4

48.6

Indianapolis-Carmel-Anderson, IN

$610,646

620

50.7

52.6

Miami-Fort Lauderdale-West Palm Beach, FL

$417,819

620

43.7

51.6

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

$74,143

619

31.3

47.1

Dallas-Fort Worth-Arlington, TX

$321,465

616

30.7

48.8

Washington-Arlington-Alexandria, DC-VA-MD-WV

$280,746

614

52.8

51.2

Atlanta-Sandy Springs-Roswell, GA

$427,100

614

46.0

51.8

Orlando-Kissimmee-Sanford, FL

$189,049

609

26.1

46.8

Riverside-San Bernardino-Ontario, CA

$1,380,613

608

41.8

53.8

Seattle-Tacoma-Bellevue, WA

$388,276

607

27.5

48.6

Detroit-Warren-Dearborn, MI

$56,249

605

30.8

50.0

Jacksonville, FL

$929,868

596

29.7

46.2

Charlotte-Concord-Gastonia, NC-SC

$705,956

590

51.9

50.4

National Average

$383,667

620

40.5

50.0

"Small businesses located in cities that are typically associated with high startup costs, especially in the technology industry, such as San Jose, Los Angeles, New York, and San Francisco, tend to have higher credit scores," explained Arora. "They are also in the areas that have a longer track record of business success."

About the Biz2Credit Fastest Growing Small Business Cities Study

Biz2Credit analyzed 12,000 businesses with less than 250 employees and less than $10 million in annual revenues from across the country that have been in operation for more than 1 year.

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